iHeartMedia, Inc. Withdraws Full Year 2020 Guidance Due to COVID-19 Impact
March 26 2020 - 7:50AM
Business Wire
iHeartMedia, Inc. (Nasdaq: IHRT) announced today that it is
withdrawing its full-year 2020 financial guidance provided on its
fourth quarter earnings call on February 27, 2020 due to heightened
uncertainty related to the novel coronavirus pandemic (“COVID-19”),
its impact on the operating and economic environment and related,
near-term advertiser spending decisions.
“Given the ongoing uncertainty surrounding the duration and
magnitude of the COVID-19 pandemic and its impact on the U.S.
economy, we believe it is appropriate to withdraw our full-year
2020 guidance. While we cannot determine the full extent of
COVID-19’s impact on our business at this time, we are monitoring
this rapidly evolving situation closely and look forward to
discussing our business in greater detail as part of our first
quarter 2020 earnings results investor call,” said Bob Pittman,
iHeart’s Chairman and Chief Executive Officer. “At iHeartMedia, our
listeners rely on us as a trusted voice for companionship and calm
and as a source for critically important information, especially
during times of crisis and need, and we remain fully committed to
fulfilling this mission.”
“iHeartMedia had a strong January and February before the
effects of COVID-19 began to unfold into a global pandemic in early
March. The challenges that COVID-19 has created for advertisers and
consumers has impacted iHeart’s revenue in recent weeks, creating a
less clear business outlook in the near term,” said Rich Bressler,
iHeart’s President, Chief Operating Officer and Chief Financial
Officer. “To maintain maximum financial flexibility during this
period, we have drawn $350 million on our $450 million senior
secured asset-based revolving credit facility (“ABL Facility”). We
believe that the additional funds from drawing on our ABL Facility,
in combination with our cash balance, provides us with a prudent
level of liquidity at this time. We fully appreciate the
unprecedented challenges posed by this crisis, however, we remain
confident in our business, our employees and our strategy. With our
experienced management team and our leadership position in the
audio sector, we are committed to navigating this period while
serving our audiences and other constituents.”
The company will provide an update on its first quarter earnings
call.
Asset-based Revolving Credit Facility due 2023
On May 1, 2019, iHeartCommunications, Inc., a wholly-owned
indirect subsidiary of iHeartMedia (“iHeartCommunications”), as
borrower, entered into a Credit Agreement (the “ABL Credit
Agreement”) with iHeartMedia Capital I, LLC, the direct parent of
iHeartCommunications, as guarantor, certain subsidiaries of
iHeartCommunications, as guarantors, Citibank, N.A., as
administrative and collateral agent, and the lenders party thereto
from time to time. The ABL Credit Agreement governs our ABL
Facility, which has an aggregate principal amount of up to $450.0
million, with amounts available from time to time equal to the
lesser of (a) the borrowing base and (B) the aggregate revolving
credit commitments. As of December 31, 2019, iHeartCommunications
had a facility size of $450.0 million, had no outstanding
borrowings and had $48.1 million of outstanding letters of credit,
resulting in $401.9 million of availability.
On March 13, 2020, iHeartCommunications drew $350.0 million
principal amount under the ABL Facility as a precautionary measure
to preserve iHeartCommunications’ financial flexibility in light of
the current uncertainty in the global economy resulting from
COVID-19. The proceeds will be available if needed to fund
iHeartCommunications’ future working capital requirements or other
general corporate purposes.
Forward-Looking Statements
Certain statements in this press release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of iHeartMedia, Inc. and its subsidiaries (the
“Company”), to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. All statements contained in this press
release that do not relate to matters of historical fact should be
considered forward-looking statements, including statements about
the impact of COVID-19 on our business, the economic environment
and our expected financial results. The words or phrases
“guidance,” “believe,” “expect,” “anticipate,” “estimates,”
“forecast” and similar words or expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other important factors, some of which are beyond
our control and are difficult to predict. Various risks that could
cause future results to differ from those expressed by the
forward-looking statements included in this release include, but
are not limited to: impacts from COVID-19; uncertain global
economic conditions; increased competition; dependence upon the
performance of on-air talent, program hosts and management;
fluctuations in operating costs; shifts in population and other
demographics; impact of our substantial indebtedness; legislative
or regulatory requirements; regulations and concerns regarding
privacy and data protection; and the other risks described in “Item
1A. Risk Factors” of iHeartMedia, Inc.’s Annual Reports on Form
10-K for the year ended December 31, 2019. Other unknown or
unpredictable factors also could have material adverse effects on
the Company’s future results, performance or achievements. In light
of these risks, uncertainties, assumptions and factors, the
forward-looking events discussed in this press release may not
occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date stated,
or if no date is stated, as of the date of this press release. The
Company does not undertake any obligation to publicly update or
revise any forward-looking statements because of new information,
future events or otherwise.
About iHeartMedia
iHeartMedia is the number one audio company in the United
States, reaching nine out of 10 Americans every month - and with
its quarter of a billion monthly listeners, has a greater reach
than any other media company in the U.S. The company’s leadership
position in audio extends across multiple platforms including more
than 850 live broadcast stations; streaming music, radio and on
demand via its iHeartRadio digital service available across more
than 250 platforms and 2,000 devices including smart speakers,
digital auto dashes, tablets, wearables, smartphones, virtual
assistants, TVs and gaming consoles; through its influencers;
social; branded iconic live music events; and podcasts as the #1
commercial podcast publisher globally. iHeartMedia also leads the
audio industry in analytics and attribution technology for its
marketing partners, using data from its massive consumer base.
iHeartMedia is a division of iHeartMedia, Inc. (Nasdaq: IHRT).
Visit iHeartMedia.com for more company
information.
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